{
  "id": 15569322,
  "title": "Analysis-Africa’s minerals value-add drive interests investors but faces energy hurdle",
  "url": "https://urgent.news/2026/10/19/analysis-africas-minerals-value-add-drive-interests-investors-but",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-19T06:06:24.000Z",
  "source": {
    "name": "Investing.com",
    "slug": "investing-com",
    "url": "https://www.investing.com/news/stock-market-news/analysisafricas-minerals-valueadd-drive-interests-investors-but-faces-energy-hurdle-4956405"
  },
  "original_language": "en",
  "account": "As African nations encourage miners to construct refineries and smelters domestically, a primary challenge hampers investment: an insufficient supply of affordable, reliable electricity. Guinea, Zimbabwe, and South Africa are among the countries leveraging export restrictions, tax incentives, and access to mineral deposits to foster local processing and increase value from their mineral resources. International investors, including the US International Development Finance Corporation and the Africa Finance Corporation, are supporting African processing projects and intend to expand their involvement. However, the collapse of South Africa's ferrochrome and steel processing industries underscores the consequences of unreliable or expensive power.\n\nGuinea, a prominent example of Africa's efforts to add value to its mining resources, recently surpassed Australia as the world's leading bauxite producer and exporter. Most of its bauxite exports are directed towards China. To bolster its capacity, Guinea aims to construct five alumina refineries, each with an annual production capacity ranging from 7 million to 8 million tons, by 2030. Following this, investments in aluminium smelters are slated. While Guinea prefers limiting bauxite export volumes to maintain market prices, it has not yet implemented such restrictions. Instead, investors interested in bauxite are encouraged to invest in smelters or railways with mining rights and tax holidays as incentives.\n\nInsufficient electricity poses a significant obstacle to the sector's aspirations. Guinea generates around 1,000 megawatts (MW) primarily through hydropower, exporting power to Senegal, Gambia, and Guinea-Bissau during the rainy season from April to November. However, the nation must import power from Ivory Coast or Senegal during the dry months. To meet its industrialization needs, including aluminium smelters, Guinea requires 5,000 MW to 10,000 MW. The primary concern is infrastructure and energy, primarily energy, Diakite emphasized. Guinea seeks investment in various economically viable energy solutions, including gas, coal, and nuclear power. Guinea lacks coal reserves.\n\nSouth Africa's ferrochrome smelting industry serves as a cautionary tale. Dozens of smelters have ceased operations in recent years mainly due to a tenfold increase in power costs since 2008. Only less than a dozen of the country's 66 ferrochrome smelters remain operational. The main lesson is the critical importance of reliable and affordable energy supply to industrialization. Mzila Mthenjane, CEO of the Minerals Council South Africa, stated that a lack of power affordability and reliability rendered South African ferroalloys uncompetitive with China. As South Africa faced challenges, China built both processing capacity and affordable power, becoming the world's leading ferrochrome refining hub. South Africa, possessing over 70% of the world's known chrome reserves, now faces competition from China, which is the largest producer of ferrochrome.",
  "summary": null,
  "key_points": [
    "African nations encourage miners to build refineries and smelters domestically.",
    "Insufficient affordable, reliable electricity hampers investment in African processing projects.",
    "South Africa's ferrochrome industry collapse highlights energy reliability's critical importance."
  ],
  "editors_take": "The push for domestic mineral processing across Africa risks failure if nations cannot secure the massive, affordable energy supplies required to compete with established global refining hubs like China.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}